02 May 2007

“We build and create by bringing to the tangible and palpable reality around us new works based on instinct, simple logic, ordinary inferences, extraordinary ideas, and sometimes even genius.” A citation from the opinion of the US Supreme Court in KSR vs. Teleflex of April 30, 2007. The court gave its opinion in a closely watched case on “obviousness”. It is the fifth patent case in the past two years in which the Supreme Court has reversed the Federal Circuit, all of them unanimous or near unanimous decisions. The Supreme Court not only rejected the Federal Circuit’s test for obviousness, it proceeded to apply the correct test that it had just enunciated to the facts of the case before it and rule for the defendant below rather than remanding to the Federal Circuit and allowing it to apply the Supreme Court’s test to the case. The Court’s opinion suggests that patents which are based on new combinations of elements or components already known in a technical field are quite likely to be found obvious under its view of the correct analysis – a development that will likely lead to many more patents being found obvious in the electronics field but should have less impact in the life sciences field. The Court explicitly rejected the Federal Circuit’s longstanding view that a patent cannot be proved obvious merely by showing that the combination of elements was “obvious to try.” Again, this holding may have more impact on patents in the electronics field than in the life sciences technologies.

Many comments have already been published on patent blogs. See for Hal Wegner’s comments on the case his column on the right side of this blog.

For European practice the decision may not be very important other than that it gives additional ammunition in the current debate in Europe whether patents are granted too easily leading to low quality and stifling of innovation. The Supreme Court uses the word “innovation” eight times in its opinion:

“These advances, once part of our shared knowledge, define a new threshold fromwhich innovation starts once more. And as progress beginning from higher levelsof achievement is expected in the nor-mal course, the results of ordinaryinnovation are not the subject of exclusive rights under the patent laws. Wereit otherwise patents might stifle, rather than promote, the progress of usefularts.”

(…)

“Granting patent protection to advances that would occur in the ordinary coursewithout real innovation retards progress and may, for patents combiningpreviously known elements, deprive prior inventions of their value or utility.Since the TSM test was devised, the Federal Circuit doubtless has applied it inaccord with these principles in many cases. There is no necessary inconsistencybetween the test and the Graham analysis. But a court errs where, as here, ittransforms general principle into a rigid rule limiting the obviousnessinquiry.”

(…)

“When there is a design need or market pressure to solve a problem and there area finite number of identified, predictable solutions, a person of ordinary skillin the art has good reason to pursue the known options within his or hertechnical grasp. If this leads to the anticipated success, it is likely theproduct not of innovation but of ordinary skill and common sense.”

(…)

“Although common sense directs one to look with care at a patent applicationthat claims as innovation the combination of two known devices according totheir established functions, it can be important to identify a reason that wouldhave prompted a person of ordinary skill in the relevant field to combine theelements in the way the claimed new invention does. This is so becauseinventions in most, if not all, instances rely upon building blocks long sinceuncovered, and claimed discoveries almost of necessity will be combinations ofwhat, in some sense, is already known.”

(…)

“If this leads to the anticipated success, it is likely the product not ofinnovation but of ordinary skill and common sense. In that instance the factthat a combination was obvious to try might show that it was obvious under§103.”

(…)

“These advances, once part of our shared knowledge, define a new threshold fromwhich innovation starts once more. And as progress beginning from higher levelsof achievement is expected in the normal course, the results of ordinaryinnovation are not the subject of exclusive rights under the patent laws.”

and by far the best:

"A person of ordinary skill is also a person of ordinary creativity, not an automaton. [page 17]

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Journal of Intellectual Property Law & Practice

In the December 2007 JIPL&P:

Pat Treacy and Sophie Lawrance, "FRANDly fire: are industry standards doing more harm than good?" One of the major benefits of standard-setting is that, once a key piece of innovation is developed, its proprietary does not exclude its use by others but allows its use by any third party willing toaccept a licence on FRAND (‘fair, reasonable, and non-discriminatory’) terms. The authors discuss how enforcement of patents that read on a (in this case: telecom) standard relate to FRAND principle

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